Decision No. (3) of 2024 - High-Risk and Increased Monitoring Jurisdictions

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Palestine Monetary Authority

Circular No. (28/2024)
To all payment service companies operating in Palestine Date: Wednesday, October 30, 2024

Subject: High-Risk Countries and Countries under Enhanced Monitoring

A copy of Decision No. (2024/3) issued by the Financial Follow-Up Unit on October 27, 2024, regarding High-Risk Countries and Countries under Enhanced Monitoring in accordance with the list issued by the Financial Action Task Force (FATF), is attached herewith. Accordingly, the necessary legal measures are requested to implement the requirements of the aforementioned decision and the specific measures to be taken, emphasizing the necessity to comply with the following:

1. Take into account concerns regarding deficiencies in the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) systems in countries classified on the "Grey List" (Countries under Enhanced Monitoring), when conducting and updating the self-assessment of AML/CFT risks.
2. Apply the Risk-Based Approach (RBA), such that the application of due diligence measures is proportionate to (risk analysis results, the nature of the financial transaction risk, customer risks, and country classification), with enhanced due diligence measures to be applied when high risks are identified.

Supervisory Group
Palestine Monetary Authority
[Signature and Stamp]

Copy: The Honorable Financial Follow-Up Unit

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Financial Follow-Up Unit
State of Palestine

Financial Follow-Up Unit
State of Palestine

Decision No. (2024/3)
Issued by the Financial Follow-Up Unit
Dated October 27, 2024

Regarding Lists of High-Risk Countries and Countries under Enhanced Monitoring

Based on the provisions of Legislative Decree No. (39) of 2022 regarding the prevention of money laundering and terrorist financing and its amendments, particularly Article (20) and paragraphs (3, 4) of Article (30), and based on National Committee for Combating Money Laundering and Terrorist Financing Decision No. (2016/4ج) issued on December 1, 2016, regarding the delegation to the Financial Follow-Up Unit to publish the list of high-risk countries issued periodically by the FATF, and subsequently as determined by the Group since February 21, 2020, up to October 25, 2024, and in addition to National Committee Decision No. (2020/5/ت) issued on February 24, 2020, regarding High-Risk Countries and Countries under Enhanced Monitoring, and subsequently to Financial Follow-Up Unit Decision No. (2020/1) dated February 25, 2020, and subsequent decisions regarding the lists of High-Risk Countries and Countries under Enhanced Monitoring.

In light of public interest requirements, it is decided as follows:

First
List of High-Risk Countries (Black List)
All financial institutions and specified non-financial businesses and professions in the State of Palestine must continue to implement the following measures regarding high-risk countries:

Country

Required Measures Regarding Countries

Democratic People's Republic of Korea (North Korea).

1. Apply targeted financial sanctions in accordance with the provisions of Executive Decree No. (2022/14) regarding the implementation of Security Council resolutions. <br> 2. Pay special attention to commercial relations and transactions with those countries, including companies and financial institutions, and apply the following countermeasures: <br> a. Apply enhanced due diligence measures to business relations and transactions with those countries (as part of countermeasures), proportionate to the risks arising therein, in accordance with the details of Articles (26, 27) of National Committee Instructions No. (4) of 2022 regarding Financial Institutions, and Articles (24, 25) of National Committee Instructions No. (3) of 2022 regarding Specified Non-Financial Businesses and Professions.

b. Apply the enhanced due diligence measures referred to in paragraph (a) of this item when dealing with any entity acting on behalf of a natural or legal person, including companies or financial institutions operating in those countries.
c. Enhance the reporting mechanisms adopted by the financial institution or one of the specified non-financial businesses and professions, including increasing cooperation among staff and promptly providing data to the Anti-Money Laundering and Counter-Terrorist Financing Officer within the financial institution or specified non-financial business/profession, to ensure that no transaction or operation suspected of involving money laundering or one of the predicate offenses related thereto, or terrorist financing, is executed, and to report this suspicion to the Unit immediately and without delay, providing all data related to the attempt to conclude such transactions, while ensuring confidentiality of the report and not notifying the client.
d. Do not establish branches, representative offices, or subsidiaries in those countries. e. Do not rely on third parties located in those countries to conduct any due diligence measures regarding customers. f. Do not establish any correspondent banking relationships or similar correspondent relationships with financial institutions in those countries.

Country

Required Measures Regarding Countries

Republic of the Union of Myanmar (Myanmar).

1. Apply enhanced due diligence measures to business relations and transactions with Myanmar, proportionate to the risks arising in the country, in accordance with the details of Articles (26, 27) of National Committee Instructions No. (4) of 2022 regarding Financial Institutions, and Articles (24, 25) of National Committee Instructions No. (3) of 2022 regarding Specified Non-Financial Businesses and Professions. <br> 2. When applying enhanced due diligence measures, ensure that funding flows for humanitarian assistance, legitimate non-profit organization activities, and financial transfers are not disrupted.

Second
List of Countries under Enhanced Monitoring (Grey List) Amend the list of Countries under Enhanced Monitoring (Grey List) stipulated in Unit Decision No. (2024/2) by adding (Lebanon, Algeria, Angola, Côte d'Ivoire), and removing Senegal, so that the list becomes as shown in the table below, and take into account concerns regarding deficiencies in the AML/CFT systems for these countries (according to the appendix attached to this decision) when conducting the self-assessment of AML/CFT risks, including identifying, analyzing, and assessing those risks.

No.	Country Name	No.	Country Name
1	Algeria	13	Monaco
2	Angola	14	Republic of Mozambique
3	Bulgaria	15	Republic of Namibia
4	Burkina Faso	16	Republic of Nigeria
5	Cameroon	17	Republic of the Philippines
6	Côte d'Ivoire	18	Republic of South Africa
7	Croatia	19	Republic of South Sudan
8	Democratic Republic of the Congo	20	Syrian Arab Republic (Syria)
9	Republic of Haiti	21	Republic of Tanzania
10	Republic of Kenya	22	Venezuela
11	Republic of Lebanon	23	Vietnam
12	Republic of Mali	24	Republic of Yemen (Yemen)

Third
Implementation
All financial institutions and specified non-financial businesses and professions must implement the provisions of this decision, which shall take effect from the date of its circular issuance.

Director of the Financial Follow-Up Unit
Dr. Firas Marar
[Signature and Stamp]

Appendix: Concerns Regarding Deficiencies in Anti-Money Laundering and Counter-Terrorist Financing Systems.

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Appendix to Financial Follow-Up Unit Decision No. (2024/3) Regarding Lists of High-Risk Countries and Countries under Enhanced Monitoring

Concerns Regarding Deficiencies in AML/CFT Systems in Countries

• Part One: Deficiencies through Evaluation Reports (for all countries):
  This section explains how to access concerns regarding the AML/CFT and proliferation financing systems of countries listed on the Grey List, as well as all other countries undergoing mutual evaluation by the FATF or peer groups. These concerns can be accessed by reviewing the mutual evaluation reports related to those countries and the subsequent follow-up reports.

The published mutual evaluation reports and follow-up reports on the FATF or MENAFATF websites contain all deficiencies and conclusions related to the AML/CFT systems of countries on the Enhanced Monitoring list and all other evaluated countries, which can be obtained via the following mechanism:

a. Accessing Mutual Evaluation Reports in English (for all countries):

1. Visit the website: www.fatf-gafi.org
2. From the Topics menu, select (Mutual Evaluations).
3. Select Mutual Evaluation Reports.
4. Search for the country name in English in the search window.

b. Accessing Mutual Evaluation Reports in Arabic (for countries evaluated by MENAFATF):

1. Visit the website: www.menafatf.org/ar
2. Select (Mutual Evaluations) then (Evaluation Reports - Second Round of Evaluation), or follow-up reports.
3. Select the report from the list that appears according to the country name.

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Appendix to Financial Follow-Up Unit Decision No. (2024/3) Regarding Lists of High-Risk Countries and Countries under Enhanced Monitoring

• Part Two: Implementation of Action Plans to Address Deficiencies
  Countries listed on the Grey List have made a high-level political commitment to address strategic deficiencies related to AML/CFT systems, and these countries continue to implement their commitments to address remaining deficiencies.

The items below outline the key areas those countries are addressing or have addressed, based on specific deficiencies identified in mutual evaluation and follow-up reports, which must be taken into consideration whether negative or positive:

Country	Key Areas
Algeria	In October 2024, Algeria made a high-level political commitment to work with the FATF and MENAFATF to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its mutual evaluation report (MER) in May 2023, Algeria has made progress on many of the MER's recommended actions including by more effectively pursuing money laundering investigations and prosecutions. Algeria will continue to work with FATF to implement its action plan by: (1) improving risk-based supervision, especially for higher risk sectors, including through the adoption of new procedures, risk assessments, supervision manuals and guidelines, as well as undertaking inspections and applying effective, proportionate and dissuasive sanctions; (2) developing an effective framework for basic and beneficial ownership information; (3) enhancing its regime for suspicious transaction reports; (4) establishing an effective legal and institutional framework for targeted financial sanctions for terrorism financing; and (5) implementing a risk-based approach to oversight of non-profit organisations, without disrupting or discouraging legitimate activity.
Angola	In October 2024, Angola made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in June 2023, Angola has made progress on some of the MER's recommended actions including enhancing national cooperation and coordination, international cooperation and the use of financial intelligence by competent authorities. Angola will continue to work with the FATF to implement its FATF action plan by: (1) enhancing its understanding of ML/TF risks; (2) improving risk-based supervision of non-financial banking entities and DNFBPs; (3) ensuring competent authorities have adequate, accurate and timely access to beneficial ownership information and that breaches to obligations are adequately addressed; (4) demonstrating an increase in ML investigations and prosecutions; (5) demonstrating the ability to identify, investigate and prosecute TF; and (6) demonstrating an effective process to implement targeted financial sanctions without delay.

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Appendix to Financial Follow-Up Unit Decision No. (2024/3) Regarding Lists of High-Risk Countries and Countries under Enhanced Monitoring

Country	Key Areas
Bulgaria	Since October 2023, when Bulgaria made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime, Bulgaria has taken steps towards improving its AML/CFT regime, including by demonstrating initial implementation of its national action plan for its AML/CFT Strategy; demonstrating initial implementation of risk-based supervision for postal money operators, currency exchange providers and real estate agents and ensuring that confiscation is pursued as a policy objective. Bulgaria should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) addressing the remaining technical compliance deficiencies; (2) ensuring that the beneficial ownership information held in the Register is accurate and up-to-date; (3) improving investigations and prosecutions of different types of money laundering in line with risks, including high-scale corruption and organised crime; (4) ensuring the ability to conduct parallel financial investigations in all terrorism investigations; (5) addressing gaps in the PF TFS frameworks; and (6) identifying the subset of non-profit organisations (NPOs) most vulnerable to TF abuse and demonstrating initial implementation of risk-based monitoring to prevent abuse for TF purposes.
Burkina Faso	Since February 2021, when Burkina Faso made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime, Burkina Faso has taken steps towards improving its AML/CFT regime, including by strengthening supervision of financial institutions and designated non-financial businesses and professions, establishing a system to provide access to competent authorities of accurate and up-to-date beneficial ownership information, and implementing a framework for the monitoring of the activities of NPOs at risk of TF abuse. Burkina Faso should continue to work on implementing its action plan to address its remaining strategic deficiency, by: implementing an effective targeted financial sanctions regime related to TF and PF. The FATF notes Burkina Faso's continued progress across its action plan, however all deadlines have expired and work remains. The FATF urges Burkina Faso to swiftly implement its action plan to address the above-mentioned strategic deficiency as soon as all deadlines expired in December 2022.
Cameroon	In June 2023, Cameroon made a high-level political commitment to work with the FATF and GABAC to strengthen the effectiveness of its AML/CFT regime. Cameroon should continue working on implementing its action plan to address its strategic deficiencies, including by: (1) aligning AML/CFT national strategies and policies with the findings of the NRA and monitoring their implementation, and demonstrating AML/CFT cooperation and coordination between competent authorities; (2) ensuring risk-based prioritisation of incoming international

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Appendix to Financial Follow-Up Unit Decision No. (2024/3) Regarding Lists of High-Risk Countries and Countries under Enhanced Monitoring

Country	Key Areas
	cooperation requests in line with risks and responding in an effective manner; (3) enhancing risk-based supervision of banks and implementing effective risk-based supervision for non-bank FIs and DNFBPs, and conducting appropriate outreach to high-risk FIs and DNFBPs; (4) maintaining and ensuring timely access by competent authorities to adequate and up to date beneficial ownership information on legal persons, and establishing a sanctions regime for violations of transparency obligations applicable to legal persons; (5) enhancing secure information exchange between the FIU, reporting entities and competent authorities and demonstrating an increase in dissemination of intelligence reports to support operational needs of competent authorities; (6) demonstrating that authorities are able to conduct a range of ML investigations, and prosecute ML in line with risks; (7) implementing policies and procedures for seizing and confiscating proceeds and instrumentalities of crime and managing frozen, seized and confiscated property, and prioritising seizure and confiscation of assets at the border; (8) demonstrating that TF investigations and prosecutions are pursued in line with risk; and (9) demonstrating effective implementation of TF and PF TFS regimes and implementing a risk-based approach to NPOs without disrupting legitimate NPO activities.
Côte D'ivoire	In October 2024, Côte d'Ivoire made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in June 2023, Côte d'Ivoire has made significant progress on many of the MER's recommended actions including by strengthening its legal AML/CFT framework through several important legislative and regulatory amendments, updating ML/TF analysis by drafting typology reports on the highest risk predicate offences, strengthening the human and technical resources of the FIU and prosecutors, and operationalising the agency in charge of the management of assets seized and confiscated. Côte d'Ivoire will continue to work with the FATF to implement its FATF action plan by: (1) enhancing its use of international cooperation in ML/TF investigations and prosecutions; (2) improving the implementation of risk-based supervision of financial institutions and designated non-financial businesses and professions and conducting outreach campaigns to improve compliance; (3) improving the verification and access of basic and beneficial ownership information of legal persons and applying sanctions in case of violation; (4) enhancing the use of financial intelligence by law enforcement authorities and improving disseminations by the FIU; (5) demonstrating a sustained increase in the number of ML and TF investigations and prosecutions of different types in line with the country's risk profile; and (6) strengthening the targeted financial sanctions framework.

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Appendix to Financial Follow-Up Unit Decision No. (2024/3) Regarding Lists of High-Risk Countries and Countries under Enhanced Monitoring

Country	Key Areas
Croatia	Since June 2023, when Croatia made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime, Croatia has taken steps towards improving its AML/CFT regime, including increasing FIU human resources and improving analytical capabilities; improving LEAs detection, investigation and prosecution of different types of ML; and increasing the application of provisional measures to secure criminal proceeds. Croatia should continue to work on implementing its action plan to address its remaining strategic deficiency: demonstrating immediate communication of changes in UN TFS regimes to reporting entities.
The Democratic Republic of the Congo	Since October 2022, when the DRC made a high-level political commitment to work with the FATF and GABAC to strengthen the effectiveness of its AML/CFT regime, the DRC has taken steps towards improving its AML/CFT regime, including by providing training to supervisory authorities and the FIU to build their technical capacity. The DRC should continue to work to implement its FATF action plan to address its strategic deficiencies, including by: (1) developing and implementing a risk-based supervision plan; (2) building the capacity of the FIU to conduct operational and strategic analysis; (3) strengthening the capabilities of authorities involved in the investigation and prosecution of ML and TF; and (4) demonstrating effective implementation of TF and PF-related TFS.
Haiti	(Statement from June 2024) Since June 2021, when Haiti made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime, Haiti has taken steps towards improving its AML/CFT regime, including improving the FIU's access to and use of a wide range of information in its financial intelligence products through the adoption of a new organic law. The FATF recognises the political commitment expressed at a high level and the efforts demonstrated by Haiti to advance its commitments in the midst of the challenging social, economic and security situation within the country. Haiti should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) completing its ML/TF risk assessment process and disseminating the findings; (2) implementing risk-based AML/CFT supervision for all financial institutions and DNFBPs deemed to constitute a higher ML/TF risk; (3) ensuring basic and beneficial ownership information are maintained and accessible in a timely manner; (4) ensuring the FIU has adequate resources and processes to produce and disseminate operational and strategic analysis to competent authorities for combatting ML and TF; (4) demonstrating authorities are identifying, investigating and prosecuting ML cases in a manner consistent

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Appendix to Financial Follow-Up Unit Decision No. (2024/3) Regarding Lists of High-Risk Countries and Countries under Enhanced Monitoring

Country	Key Areas
	with Haiti's risk profile; (5) demonstrating an increase of identification, tracing and recovery of proceeds of crimes; (6) addressing the technical deficiencies in its targeted financial sanctions regime; and (7) conducting appropriate risk-based monitoring of NPOs vulnerable to TF abuse without disrupting or discouraging legitimate NPO activities. The FATF notes Haiti's continued progress across its action plan, however all deadlines are expired and work remains. The FATF encourages Haiti to continue to implement its action plan to address the above-mentioned strategic deficiencies. The FATF notes Haiti's continued progress across its action plan, however all deadlines are expired and work remains. The FATF encourages Haiti to continue to implement its action plan to address the above-mentioned strategic deficiencies.
Kenya	(Statement from February 2024) In February 2024, Kenya made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in September 2022, Kenya has made progress on some of the MER's recommended actions including by making amendments to its AML/CFT legislation to bring its framework in closer compliance with the FATF recommendations and establishing a case management system to better manage its international cooperation requests. Kenya will work to implement its FATF action plan by: (1) completing a TF risk assessment and presenting the results of the NRA and other risk assessments in a consistent manner to competent authorities and the private sector and updating the national AML/CFT strategies; (2) improving risk-based AML/CFT supervision of FIs and DNFBPs and adopting a legal framework for the licensing and supervision of VASPs; (3) enhancing the understanding of preventive measures by FIs and DNFBPs, including to increase STR filing and implement TFS without delay; (4) designating an authority for the regulation of trusts and collection of accurate and up-to-date beneficial ownership information and implementing remedial actions for breaches of compliance with transparency requirements for legal persons and arrangements; (5) improving the use and quality of financial intelligence; (6) increasing ML and TF investigations and prosecutions in line with risks; (7) bringing the TFS framework in compliance with R.6 and R.7 and ensure its effective implementation; and (8) revising the framework for NPO regulation and oversight

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Appendix to Financial Follow-Up Unit Decision No. (2024/3) Regarding Lists of High-Risk Countries and Countries under Enhanced Monitoring

Country	Key Areas
	to ensure that mitigating measures are risk-based and do not disrupt or discourage legitimate NPO activity.
Lebanon	In October 2024, Lebanon made a high-level political commitment to work with the FATF and MENAFATF to strengthen the effectiveness of its AML/CFT regime in spite of the challenging social, economic and security situation within the country. Since the adoption of its MER in May 2023, Lebanon has made progress on several of the MER's recommended actions and has applied measures to its financial sector, including through issuing a circular for banks and financial institutions to establish a department dedicated to combating bribery and corruption related crimes and guidance on politically exposed persons, while taking measures against unlicensed financial activity. Lebanon will continue to work with the FATF to implement its FATF action plan by: (1) conducting assessments of specific terrorist financing and money laundering risks identified in the MER and ensuring that policies and measures are in place to mitigate these risks; (2) enhancing mechani